Citizens Bank v. Valdosta Mill & Elevator Co.

1. No officer, or set of officers, of a corporation is authorized to divert its property or pledge its credit for the payment or securing of the individual debt of an officer; and, except in cases where the rights of innocent third persons may have become involved, any such attempted misapplication will be annulled or avoided in any appropriate proceeding; and this is true without regard to the form or method which may have been pursued in such illegal undertaking. Accordingly, a bank with knowledge that an officer of a corporation is using the company’s funds on deposit with it to discharge…